WiSe 2024-2025 CMO Lecture 2 PDF

IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Creating Market Offerings Lecture 2 Managing the FEI process: Research 15.10.2024 Prof. Dr. Jelena Spanjol  IN S T IT U T E F O R IN N O V A T...

IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Creating Market Offerings Lecture 2 Managing the FEI process: Research 15.10.2024 Prof. Dr. Jelena Spanjol  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Course Organization: Lectures (Prof. Dr. Jelena Spanjol) – subject to change Module Topic # Date Time (c.t.) Location Course organization Kick Off 1 Mon, 14.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Foundational concepts Process I (research) 2 Tue, 15.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 Process Process II (ideation) 3 Mon, 21.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Process III (prototyping) 4 Tue, 22.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 Decisions I 5 Mon, 28.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Decisions Decisions II 6 Tue, 29.10.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 Connecting the dots Guest Lecture 1 7 Mon, 04.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 People I 8 Tue, 05.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 People People II 9 Mon, 11.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Connecting the dots Guest Lecture 2 10 Tue, 12.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 Performance Objectives and metrics 11 Mon, 18.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Connecting the dots TBA 12 Tue, 19.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 214 Wrap Up Q&A 13 Mon, 25.11.2024 10:00-12:00 Geschw.-Scholl-Pl. 1 – A 120 Exam Thur, 12.12.2024 16:00 -20:00 Geschw.-Scholl-Pl. 1 – B 201 2  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Agenda 1 Recap Front vs back end of innovation 2 Research Definition and input 3 Frameworks How to conduct research in the front end of innovation 4 Discussion Questions & Comments 3  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Agenda 1 Recap Front vs back end of innovation 2 Research Definition and input 3 Frameworks How to conduct research in the front end of innovation 4 Discussion Questions & Comments 4  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Agenda 1 Recap Front vs back end of innovation 2 Research Definition and input 3 Frameworks How to conduct research in the front end of innovation 4 Discussion Questions & Comments 7  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Three fundamental activities in the FEI process Problem Identification Research Ideation Prototyping Research is a discovery process and provides the foundation for hypotheses. Because the FEI is problem-driven, detailed understanding of the context, the stakeholders (users, buyers, sellers, intermediaries, etc.), and the motivations of those stakeholders is required. Managing the research component of the FEI process requires openness to hear and refute assumptions. 8  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Market learning tools – primary research Primary research is research Surveys Interviews Focus groups Observation conducted for a specific purpose. First-hand accounts of user experiences are critical for building an understanding of the problem space. Consumer Published Government Customer sales reports articles and data feedback studies 9  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Market learning tools – secondary research Secondary research makes use of Surveys Interviews Focus groups Observation information previously researched for other purposes and may be publicly available. This type of information and data provides an understanding of the Consumer Published Government Customer broader problem space. sales reports articles and data feedback studies 10  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: “In the age of information, ignorance is a choice.” — Donny Miller Picture: https://aofirs.org/articles/4-data-collection-techniques-which-one-s-right-for-you Picture: https://www.relevantinsights.com/articles/secondary-research-advantages-limitations-and-sources/ 11  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: How companies learn about problems to solve Methods used: Methods used: Interviews (73%) Interviews (64%) Focus groups (66%) Focus groups (55%) Complaint analysis (65%) Brainstorming with customers (50%) Early FEI Late FEI process (Over)Reliance in companies on interviews and focus groups No discrimination between early vs late stages of FEI Creusen, Mariëlle & Hultink, Erik & Eling, Katrin. (2013): Choice of consumer research methods in the front end of new product development. International Journal of Market Research, 55, 81-104. 12  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through listening (Voice of Customer/VOC) Realization Objectives § 8-10 users of the product § exploration of customers’ attitudes and § normally 2 hours opinions § the discussion is taped (audio or video tape) § documentation of usage situations § the discussion is conducted by a moderator § understanding buying processes Study parameters (qualitative approach) § Study Setup: Selection and role of moderator, location § Composition of the group: Size, demographics, incentives § Costs for 10 participants around 5,000 EUR Pitfalls Mandatory reading: § social pressure / reluctance to reveal feelings Griffin, A.; Hauser, J. R. (1993). The voice of the customer. § group thinking mentality leads to diluted insights Marketing Science, 12(1), 1-27 § participants can influence each other Griffin, A.; Hauser, J. R. (1993). The voice of the customer. Marketing Science, 12(1), 1-27; Urban, G.L.; Hauser, J.R. (1993): Design and Marketing of New Products, 2nd ed., New Jersey, 148 Picture: https://innovationlabs.harvard.edu/events/understanding-customer-needs/ 13  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T How many different peelers do you have? 14  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Peeler 1 Peeler 2 Peeler 3 Which of these Peeler 4 Peeler 5 Peeler 6 peelers do you have? Peeler 7 Peeler 8 Peeler 9 16  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Peeler 1 Peeler 2 Peeler 3 What problems do Peeler 4 Peeler 5 Peeler 6 you / did you have with peelers? Peeler 7 Peeler 8 Peeler 9 18  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Starting out with observations… Peeler 1 Peeler 2 Peeler 3 People peel vegetables and fruits on a regular basis People like help with peeling fruits and vegetables (jobs!) Most people own more than one tool for peeling fruits and Peeler 4 Peeler 5 Peeler 6 vegetables …and moving towards insights Peeler 7 Peeler 8 Peeler 9 Why do people have more than one peeler? 20  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T What customers say: The peeler: Peeler Peeler Peeler 1 2 3 Carrots and potatoes are very different. peels a variety pf products. When I peel a zucchini, it gets slimy and is safe to use and store. Peeler Peeler Peeler slippery. can be used ambidextrously. 4 5 6 I don’t bother with peeling – I just leave saves time. Peeler Peeler Peeler the skin on. is easy to clean. 9 7 8 This looked OK in the store. is comfortable to use. I cut myself with this one. is durable. This one is fast, but it takes a lot off. creates minimal waste. How do you peel a squash? stays sharp or is easily sharpened. I am left-handed; I just use a knife. It just takes too much time. The blade is dull. My hand cramps after a while. 21 IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Peeler Peeler Peeler 1 2 3 Peeler Peeler Peeler 4 5 6 Peeler Peeler Peeler 7 8 9 22  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T feature/benefit = pain reliever/pain = ultra sharp blade/can't get the skin off Gains / Pains Gain creators / Pain relievers 23  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T feature/benefit = gain creator/gain = soft grip/comfortable to use Gains / Pains Gain creators / Pain relievers 24  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Descriptive vs. interpretive research Consumer needs Consumer insights What are the consumers’ needs that new products What triggers consumers’ attitudes and actions address? (motivations, moods, mindsets, desires etc.)? Marketing perspective: Design perspective: market research (descriptive) ethnographic storytelling (actionable) Focus on solution space Focus on problem space Problem framing: „The elevator is too slow.“ „The wait is annoying.“ Re-framing the problem Solution space: „Make the elevator faster.“ Make the wait feel shorter.“ (e.g., new lift) (e.g., play music) Cayla, J., & Arnould, E. (2013). Ethnographic stories for market learning. Journal of Marketing, 77(4), 1-16. Pictures: https://www.freepik.com/premium-vector/long-wait-character-sleeping-with-book-face-nervous-woman-hurry-businessman-look-wrist-watch-appointment-airport-departure-delay-impatiently- 25 waiting-cartoon-people-vector-illustration_18517779.htm  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through the ethnographic approach (1/5) Uncovering insights via the systematic study of people and cultures. Applying social science methods to the creation of new products, services and customer experiences. Gathering data: observing activities and document what people do in context Analyzing data: making sense and meaning of user activities and interactions Results in: a deep understanding of users Allows for: concepts that address the broad view of needs of users Cayla, J., & Arnould, E. (2013). Ethnographic stories for market learning. Journal of Marketing, 77(4), 1-16. Picture: https://www.testingtime.com/en/blog/contextual-inquiry/ 26  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through the ethnographic approach (2/5) Systematic observation process Identification of latent customer needs while using a product Observation in a natural environment Information that can be gathered by observation Implicit, latent, unarticulated user needs (e.g., inappropriateness of using a man’s safety razor designed for faces on underarms and legs) Interactions with the customers’ usage context (e.g., unloading the dishwasher in a narrow kitchen) Attributes that are intangible, cannot be easily expressed (e.g., emotional reactions to odors à smell of a car’s interior) User customization, new uses of products (e.g., Cheerios as a tidy snack anytime and anywhere to occupy restless tots) Leonard, D.; J. F. Rayport (1997): Spark innovation through empathic design. In: Havard Business Review, 75(6), 102-113. 27  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through the ethnographic approach (3/5) Histories Discovering a more complete picture of the What users have done. problem space (and particularly the users inside that space) requires multiple methods. Each method uncovers a different facet of the problem space. Focus groups/VOC Observational What users say they do. What users actually do. People don’t do what they say they do. People don’t do what we think they do. People don’t do what they think they do. Segmentation Who users are. Leonard, D.; J. F. Rayport (1997): Spark innovation through empathic design. In: Havard Business Review, 75(6), 102-113. 28  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through the ethnographic approach (4/5) Observing everyday lives of users will reveal tacit needs that people are typically unable to articulate Provides rich data Cayla, J., & Arnould, E. (2013). Ethnographic stories for market learning. Journal of Marketing, 77(4), 1-16. 29  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T FEI research: Discovering customer insights through the ethnographic approach (5/5) Work-arounds: what people invented to get the job done Barriers: overt hurdles and sticking points Repurposed objects: shows unmet needs Wear patterns: show vital clues User “torture”: Co-opting discomforts that users endure We make use of opportunities present in our immediate surroundings Adaptation We alter the purpose of context of things to meet our objectives Cayla, J., & Arnould, E. (2013). Ethnographic stories for market learning. Journal of Marketing, 77(4), 1-16. 30  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Agenda 1 Recap Front vs back end of innovation 2 Research Definition and input 3 Frameworks How to conduct research in the front end of innovation 4 Discussion Questions & Comments 31  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Ethnographic Research: Organizing framework I A E I O U is a simple framework that helps researchers collect and interpret observational data A = Activities. What are people doing? E = Environments. Where are these activities taking place? I = Interactions. Who is interacting with whom? O = Objects. What artifacts and objects do you observe? U = Users. Who is there? What are their roles and relationships? Robinson, R. (2015): Building a Useful Research Tool: An Origin Story of AEIOU. Retrieved March 27, 2018, from https://www.epicpeople.org/building-a-useful-research-tool/.; Wasson, C. (2000): Ethnography in the Field of Design. In: Human Organization, 59(4), 377-388. 32  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Ethnographic Research: Organizing framework II (1/3) Mandatory reading: Christensen, C. M., Hall, T., Dillon, K., & Duncan, D. S. (2016). Know your customers’ “jobs to be done”. Harvard Business Review, 94(9), 54- 62. https://hbr.org/2016/09/know- your-customers-jobs-to-be- done 33  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Ethnographic Research: Organizing framework II (2/3) https://jtbd.info/know-the-two-very-different-interpretations-of-jobs-to-be-done-5a18b748bd89 34  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Ethnographic Research: Organizing framework II (3/3) http://www.whencoffee andkalecompete.com/ Alan Klement, When Coffee and Kale Compete, Second Edition, page 33. 35  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T Agenda 1 Recap Front vs back end of innovation 2 Research Definition and input 3 Frameworks How to conduct research in the front end of innovation 4 Discussion Questions & Comments 36  IN S T IT U T E F O R IN N O V A T IO N M A N A G E M E N T References Mandatory Readings: Christensen, C. M., Hall, T., Dillon, K., & Duncan, D. S. (2016). Know your customers’ “jobs to be done”. Harvard Business Review, 94(9), 54-62. Griffin, A.; Hauser, J. R. (1993). The voice of the customer. Marketing Science, 12(1), 1-27. Optional Readings: AEIOU Empathy Map. (n.d.).: from https://www.creatlr.com/template/1knjaTEkdFHvtBOLr8DAx/aeiou-empathy-map/. Cayla, J., & Arnould, E. (2013): Ethnographic stories for market learning. Journal of Marketing, 77(4), 1-16. Creusen, Mariëlle & Hultink, Erik & Eling, Katrin. (2013): Choice of consumer research methods in the front end of new product development. International Journal of Market Research, 55, 81-104. Klement, Alan, When Coffee and Kale Compete, Second Edition, http://www.whencoffeeandkalecompete.com/ Leonard, D.; J. F. Rayport (1997): Spark innovation through empathic design. Havard Business Review, 75(6), 102-113. Lilien, G.L.; Morrison, P.D.; Searls, K.; Sonnack, M.; von Hippel, E. (2002): Performance Assessment of the Lead User Idea–Generation Process for New Product Development. Management Science, 48(8), 1042-1059. Lüthje, C.; Herstatt, C. (2004): The Lead User Method: Theoretical-Practical Foundation and Practical Implementation. R&D Management, 34(5), 549-564. Robinson, R. (2015): Building a Useful Research Tool: An Origin Story of AEIOU. Retrieved March 27, 2018, from https://www.epicpeople.org/building-a-useful- research-tool/. Urban, G.L.; Hauser, J.R. (1993): Design and Marketing of New Products, 2nd ed., New Jersey, 148. Von Hippel, E. (2009): Democratizing innovation: the evolving phenomenon of user innovation. International Journal of Innovation Science, 1(1), 29-40. Wasson, C. (2000): Ethnography in the Field of Design. Human Organization, 59(4), 377-388. 38 Creating Market Offerings (CMO) Institute for Innovation Management (IIM) · [email protected] · 39